Inside Mr Cao’s Cadillac showroom various models are side by side. An SUV at the back has a canoe on its roof rack.

I watched a group of three youngish men come in and sit down for the sales treatment. They didn’t buy.

They didn’t even have a good look inside the cars. Mr Cao thinks the main reason is a tax cut that has gone away.

“In 2018 the government cancelled the tax subsidy on car purchases, which was a shock to us,” he says.

This benefit has been gradually wound down. Others think a credit squeeze has caused the demand for cars to drop.

Image captionCao Chenyi thinks that the end of a tax credit is the main reason behind falling car sales

After a decade of near doubling its debt – to almost 300% of China’s GDP – 2018 was the year that the government tried to deal with the aftermath of a credit crisis. That crisis was centred on peer-to-peer lending, known as P2P.

P2P lenders offer loans to individuals from a pool of funds supplied by other individuals and other businesses, thereby cutting out banks.

The collapse of many of the P2P lending platforms is thought to have had a significant impact on both house and car sales, because borrowed money was being used as down payments for both.

Mr Xie says the credit system “used to be lubricated by these guys” and suddenly that has stopped.

“They lent to people who could not pay back. [Borrowers] shifted their debt from one platform to another.”

He tells me he’s heard statistics suggesting one in four such borrowers “have no ability to pay back”.

Slowing economy

China’s car industry is also a key driver of industrial output and a barometer of consumer demand.

But growth in China’s economy is slowing, and the trade war with the US is starting to bite. Retail sales have slowed to a pace not seen for more than a decade.

A couple of hours away from the car dealership is a tiny hair salon, in the heart of Shanghai’s old west side.

Sun Qiang is the owner and haircutter-in-chief. For a few hours I sat and watched him deal with a handful of customers. First up were three women, two of whom had curlers in, and didn’t look happy to be there.

Image captionHairdresser Sun Qiang is saving money to pay for education and healthcare

He told me he’d cut my hair for 40 yuan ($6; £4.50). His place is at the bottom end of what you might call the barometer of China’s consumption.

But business isn’t dropping off. He is, though, a barber who also cuts women’s hair.

When it comes to cars he’d like a Chinese brand SUV. But it’s not likely any time soon. He doesn’t live that far from work and the buses are good. Plus he doesn’t want to borrow.

“I think some car dealers, they want to boost their sales, so they need such consumers who love to pay by loans,” he explains.

“But as a traditional Chinese person, I think we should only buy stuff that we can afford.”